Tag Archives: Debt Crisis

The House Budget Committee unveiled a budget plan for the next fiscal year that proposes raising guarantee fees for the GSEs and dismantling the Dodd-Frank Act. Committee chair Rep. Paul Ryan billed the so-called Path to Prosperity as a measure that will slash $6.2 trillion in government expenditures over the next decade and draw down the deficit by more than $4.4 trillion in contrast with President Barack Obama├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós budget. House Republicans proposed raising guarantee fees, downsizing portfolios for the GSEs, and eventually leaving housing finance to only the Federal Housing Administration.

A steady pace for home prices and sales signals housing recovery, but a disorderly default by any of the euro zone states overseas could choke affordability according to Capital Economics analysts.

All-time highs for housing affordability persisted this week as interest rates for fixed-rate mortgages hovered near their record-breaking lows, a sign that Europe continues to ward off investors. Real estate Web site Zillow found only a minor shift for the 30-year fixed-rate mortgage, which lingered between 3.70 percent and 3.75 percent before nestling at 3.69 percent Tuesday. The 15-year loan stayed near 2.95 percent, along with rates for 5-year and 1-year adjustable-rate mortgages that averaged 2.65 percent, according to the Web site.

Moody├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós Investor Service slashed credit ratings for Wells Fargo Home Mortgage Thursday over concerns about deterioration in the quality of prime and subprime loans. The ratings agency downgraded the servicer from SQ1 to SQ2+. When reviewing residential mortgage servicers, Moody├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós rates SQ1 as strong and SQ5 as weak, with modifiers like pluses and minuses signifying their relative strength and weakness in each category. Moody├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós cited the $25-billion settlement as one reason why, saying that added public pressure over negotiations lengthened foreclosure timelines.

This week mortgage rates played by the same script seen for the last few months, furthering a season for all-time high affordability while fears for Europe drove investors across the Atlantic. Finance Web site Bankrate.com, mortgage giant Freddie Mac, and real estate Web site Zillow.com delivered a dearth for rates across the board. Bankrate.com likewise offered declines for loans across the board. For its part, Greece remains in the clutch of a debt crisis that drew $172 billion in bailout funds from eurozone finance ministers last week.

The refinance share of mortgage applications broke with several weeks of activity by falling below 80 percent last week, even while more borrowers took advantage of the expanded Home Affordable Refinance Program. The Mortgage Bankers Association said in a weekly survey that mortgage application volume contracted by 0.3 percent from the week before, while the index covering it dropped 9.4 percent on a seasonally unadjusted basis. The Refinance Index climbed down by 2.2 percent from the week before.

Interest rates for mortgage loans climbed close to 4 percent this week as a second Greek bailout sowed more confidence in the investor crowd and signs emerged that housing may see an upswing. Finance Web site Bankrate.com and mortgage company Freddie Mac each released separate surveys, with analysts attributing the rise to different causes. The GSE found the 30-year fixed-rate mortgage lifting to 3.95 percent, up from 3.87 percent. Bankrate.com saw rates for the loan hit 4.16 percent, up from 4.10 percent last week.

Signaling the still-steady role played by eurozone affairs in U.S. markets, real estate Web site ZIllow found interest rates for mortgage loans by and large rising this week. The Web site found the 30-year fixed-rate mortgage ticking up to land somewhere between 3.67 percent and 3.76 percent before arriving at the latter rate Tuesday. For the 15-year loan, the rate hovered around 3 percent, while rates for 5-year and 1-year adjustable-rate mortgages stayed near 2.75 percent.

The Dow Jones Industrial Average finished by end of day Friday at a clip just below 13,000 points, lifting stocks and shares for all but one of the four major financial institutions. The jump reportedly marks the highest for the Dow Jones since 2008, just before the worst of the financial crisis, as investors got bullish on another round of bailout votes for debt-saddled Greece. The index closed on a .35-percent hike Friday, up 45.79 points, giving Wells Fargo a 2.37-percent boost to wrap up stocks at $31.09 per share.

The story for mortgage rates stayed the same Thursday, with the specter of sovereign default keeping investors close to Treasury debt and interest for home loans at all-time lows. Both GSE Freddie Mac and finance Web site Bankrate.com reported yet more troughs for fixed-rate mortgages, failing to break with more than two months of low interest rates for home loans. For Freddie, the 30-year loan remained unchanged from last week at 3.87 percent, even while Bankrate.com found new record-breaking lows for the same at 4.10 percent, down from 4.14 percent last week.